Characteristics Of The Texas Economy
- Category Geography, Economics
- Subcategory United States, Global Economy
- Topic Texas, World Economy
- Words 716
- Pages 2
The Texas economy wasn’t always as substantial and diverse as it is today. Although it maintains its position as one of the strongest economies in existence, it has its fair share of downsides. Since the early Spanish settlements to the modern-day economy, Texas has discovered many important factors that contribute to the economy. For example, oil, natural gas, cotton, cattle, and other natural resources. An arrangement called the North American Free Trade Agreement (NAFTA) has also introduced the Texas economy to several advantages and disadvantages. One of the most effective ways Texas has developed more efficiently was by practising the theory of creative destruction.
When Spaniards explored and settled in Texas, the land was a scantily populated domain with little to no economic or political value. In about three centuries from roughly 1519 to 1800, the Spanish built small settlements in the region. Eventually, Mexico received its ultimate independence and in time, Texas joined Coahuila. By 1820, immigration from the United State added to the Anglo population, and empresarios had begun to invite colonists. Texas’s population started at 7,000, but because of the colonization, immigration, slaves, natives, and non-natives, the population increased to about 50,000. From the Republic of Texas to early statehood, there was an increase in southern immigrants from the United States who brought their expertise in growing cotton with them. Since cotton is a labour-intensive crop, many slaves were brought with the southerners. After the Civil War, cotton production increased, and Texas had adopted the name ‘King Cotton’. Cotton encouraged investment capital, technological advancements, and labor. Productions involved in agricultural divisions like ranching, timber, and corn expanded considerably in the nineteenth century, but cotton was still the leading crop. However, in the 1920s, the demand for cotton took a major decline because of the Great Depression, lack of laborers, other abroad cotton productions, and government reduction in produce to sustain prices.
Following the cotton’s decline, oil showed an increasing prominence in the early twentieth century, however commercial oil had limited success after the civil war. On January 10, 1901, is the most important and famous date in Texas’s petroleum industry because this day was when the gusher erupted the oil well in Spindletop. Thousands of oil barrels were filled before the well could be capped. Spindletop created an uproar throughout the entire world and inspired drilling in Texas that has remained since. According to the Texas Almanac, Texas petroleum production developed from ‘836,039 barrels in 1900 to 4,393,658 in 1901; and in 1902 Spindletop alone produced 17,421,000 barrels or 94 percent of the state’s production.’ The prices dropped 3 cents a barrel, resulting in an all-time low (‘History of Texas’). With large monetary payoffs and no economic competition, Texas oil spread quickly, transforming old and dusty towns such as Ft. Worth, Midland, Kilgore, and Wichita to fall into luxurious oil centers. Later, as the industry evolved, Texas oil grew to influence the national economy and politics.
In recent years, global recessions and fuel-efficient technology have discouraged the oil market even though the debt and demands of international countries raised oil extraction. Author M. Ray Perryman stated that in this period ‘forces have, of course, combined in recent years to produce a ‘glut’ in the international oil market’ (482). The ‘glut’ started the first Texan economic decline in more than two decades. The year 1982, Microelectronics and Computer Technology Cooperation was announced and was located in Austin. The location and the decrease of the oil industry helped turn all focus towards the technological sector. Similar to the oil and cotton industry, the’ high tech’ industry is prospering. San Antonio and Austin are becoming efficient major research areas, and Austin is becoming an innovative city. San Antonio and the Dallas/Ft. Worth became effective bio-medical facilities, however, Houston lacked new prospects but still had a place in bio-medical research, electronic manufacturing, chemical processing, and petroleum-related industries. Universities with large engineering programs like UT, Texas A&M University, and Rice University were a notable portion of the MCC. According to M. Ray Perryman, the technological industry is supposed to rise ‘at a rate of about 4.3 percent, thus raising its ‘market share’ of state employees to somewhat more than 6.5 percent’ (485). To conclude, the ‘high tech’ industry should continue with relative ease in Texas for the next two decades.